Samsung Aims to Be Among Top 3 Wireless Network Gear Makers

Samsung gained 0.1 percent to 933,000 won as of 1:16 p.m. in Seoul trading, the highest level since March 4. Photographer: Kimimasa Mayama/Bloomberg

April 1 (Bloomberg) -- Samsung Electronics Co., the world’s
second-largest mobile-phone maker, aims to become one of the
three biggest producers of network gear in four years by tapping
demand for new equipment that can handle data faster.

“In terms of revenue and the number of contracts, we’re
trying to break into the top three,” I.P. Hong, head of the
marketing group at Samsung’s Telecom Systems Business, said in
an interview in Seoul. “We’re positively forecasting we’ll be
able to achieve that around 2015.”

Samsung, which says it ranks in the top 10, is vying for a
larger share of a $34 billion phone-network equipment market
dominated by Ericsson AB, Huawei Technologies Co. and Nokia
Siemens Networks. The companies compete for contracts to provide
routers and switches for fourth-generation networks as operators
invest to meet a surge in data traffic spurred by the popularity
of Web-connected mobile devices.

From this year, Suwon, South Korea-based Samsung will
accelerate sales of products based on the 4G wireless technology
known as long-term evolution, or LTE, Hong said yesterday.

The market for LTE equipment will probably surge fourfold
to $12 billion by 2014 from $3 billion this year, Hong said.
Ying Weimin, president of Huawei’s LTE business, forecast in
November that global contracts for such gear may climb to $10
billion in the same period.

Samsung rose 0.9 percent to 940,000 won, the highest level
since March 4, at the 3 p.m. close of trading in Seoul. The
stock has declined 1 percent in 2011 after advancing the past
two years.

Market Growth

The global wireless equipment market will expand about 5
percent this year, Dell’Oro Group, a researcher based in Redwood
City, California, said in November. The industry was probably
worth about $34 billion in 2010, according to Stefan Pongratz, a
Dell’Oro analyst.

Samsung aims to boost its network equipment sales by 30
percent to 40 percent annually, Hong said, declining to say how
much revenue was generated last year.

The company is working with 13 phone operators in eight
countries including the U.S. to build LTE networks. Samsung is
trying to win “a few more contracts” in the U.S., which will
remain the biggest market at the early stage of the transition
to 4G, and is also seeking opportunities in China, Europe, India
and Southeast Asia, Hong said.

While a mass deployment of LTE networks won’t take place
until 2014 to 2015, Samsung has begun to roll out smartphones
supporting the technology and plans to introduce a tablet
computer capable of running on LTE in the second half, he said.

Samsung’s focus so far has been on developing products
using WiMax technology, an alternative 4G standard to LTE, Hong
said. Growth of the WiMax market, of which Samsung has about a
one-third share, probably has peaked as operators switch to LTE
and next-generation WiMax, he said. Samsung will continue to
adopt both technologies, he said.